NEW YORK (CNN/Money) -
Dave Goldoff once shunned the real estate business, despite the success his father and uncle had with a few buildings they bought together in lower Manhattan.

For Dave, real estate seemed too conventional.

Instead, he worked in Internet entertainment, a fast-paced world where he rode a roller coaster of different jobs. Projects ended with mass layoffs or a neat corporate crash-and-burn.

When the bubble burst, he found himself idle and living in a family apartment building on Water Street in Manhattan. His uncle suggested he earn back some rent by running the building.

"I liked it because I could see things happening," he says.

"In 2000, they were getting $1,800 a month for a one-bedroom apartment," he recalls. "I spent $20,000 to $30,000 to renovate and the rent went up to $2,300."

Then came September 11.

The building lies eight blocks downwind of ground zero. Goldoff had been at the Twin Towers that morning. Back home, he heard the first plane crash. "I thought the cooling tower on our roof had fallen." He was outside when the second plane hit.

Everyone evacuated, but authorities called Goldoff back in because they wanted to use the roof for communications devices.

"I saw a warship in the river, fighter planes patrolling overhead, and armed guards around the building, which was covered with soot," he says. The stench from the burning buildings lasted for weeks.

"A lot of tenants were stressed out and walked away from their leases," he says. "But we couldn't go after them for leaving."

Getting started

Managing the building piqued Goldoff's real estate instincts. He decided to go back to school at night for a degree in the field. He's now nearing the end of a four-year course of study at NYU.

Early on, he took a job with a real estate investment firm. "My uncle told me to learn how people buy and sell properties," he says. "What I learned was that I didn't want to be a broker."

He started going around the city, trying to get a handle on prices. He looked at many dilapidated buildings with an eye toward buying them cheap, doing a quick fix-up, and selling fast.

"I met people doing foreclosure flips," he says. "I went to auctions, and I sat and listened. I had no money and no clients."

He decided the best, low-risk proposition would be to buy land. He and a high school friend, Erik Orsino, partnered up to start a company, D&E Management.

They bought their first property in June 2003, a commercial-zoned lot in Far Rockaway, paying $80,000 at a foreclosure auction for it, putting down 10 percent. They planned to sell the contract within 30 days -- to avoid closing costs -- to a client who was willing to pay $125,000.

It sounded great: Put down $8,000 and get back $45,000 less than a month later. But title problems plague foreclosures.

"I would guess that 99 percent of auctioned properties don't have a clear title," says Goldoff. Either an old owner is still on the deed or there's a tax lien or the land has wetland issues.

The lack of a clear title is not always a disadvantage. According to Goldoff, it can buy time. Ordinarily, you must complete the deal within 30 days, which means coming up with the balance of the money.

"Auctioneers are responsible to make sure the title is clear," he says. "If it's not you can delay the closing or get your deposit back."

In the end, that "quickie" first deal took a year. But they came out of it with a $20,000 profit and a learning experience. They completed three more deals like that, before the auction game grew too crowded to continue.

"There was no room to make money," says Goldoff. "We pulled out. We had to figure out a new vehicle."

Greener fields

They turned to upstate New York. The first house they bought there was a three-bedroom, one-bath summer home on a lake in Orange County. They paid $225,000, spent $70,000 winterizing and modernizing it and putting in a second bath. It's on the market now for $450,000.

They've closed on three houses upstate, and are in contract to acquire an estate on the water in Bridgeport, Conn., where they hope to build several townhouses. Then there's an old brewery in Watkins Glen, N.Y., which they intend to buy and develop into a condo complex and resort.